Consumer Goods

AI in Hospitality Market

Global Industry Analysis and Forecast 2024-2031

Pages : 120

Base Year : 2023

Released Year : April 2024

Format :Pdf Ppt Xls

Report ID:KR671

Author : Antriksh P.

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Base Year

2023

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Forecast Year

2024-2031

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Historical Years

2019-2022

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Market Value (2023)

USD 16.33 Billion

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Forecasted Value (2031)

USD 70.32 Billion

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CAGR (2024 - 2031)

20.36%

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Fastest Growing Region (2024 - 2031)

Asia Pacific

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Largest Region

North America

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By Technology

Machine Learning (ML), Natural Language Processing, Chatbots or Travel Bots, Others

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By Hospitality Type

Food & Beverage, Lodging-Accommodation

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By Application

Customer Purchases, Travel Choices, Restaurants, Entertainment, Others


AI in Hospitality Market Size

The global AI in Hospitality Market size was valued at USD 16.33 billion in 2023 and is projected to reach USD 70.32 billion by 2031, growing at a CAGR of 20.36% from 2024 to 2031. The demand for improved customer experience is a primary driver propelling the adoption of AI technologies in the hospitality industry. Guests are more inclined toward seamless and personalized experiences throughout their stay, from the initial booking phase to the check-out process. AI enables hotels to meet these demands by analyzing vast amounts of guest data to anticipate their needs and preferences. By leveraging AI-powered chatbots, virtual assistants, and recommendation systems, hotels offer tailored recommendations, personalized amenities, and responsive customer service. As competition intensifies in the hospitality sector, delivering exceptional guest experiences becomes crucial for attracting and retaining customers. Due to this, hoteliers are increasingly investing in AI solutions to enhance guest experience, foster loyalty, and drive revenue growth.

AI refers to the integration of artificial intelligence technologies and applications to enhance various aspects of guest experiences, operational efficiency, and business processes within hotels, restaurants, travel agencies, and related sectors. This encompasses a wide range of technologies, including natural language processing (NLP), machine learning (ML), computer vision, and data analytics. AI applications in hospitality are diverse, ranging from chatbots and virtual assistants that facilitate personalized guest interactions and streamline reservation processes to recommendation systems that suggest customized experiences and amenities based on guest preferences and past behavior. Additionally, predictive analytics is employed for demand forecasting, dynamic pricing, and inventory management, while computer vision enables facial recognition for security purposes and enhances the efficiency of check-in/out procedures, which positively influences the product outlook.

Analyst’s Review

The AI in hospitality market is experiencing robust growth, driven by the industry's increasing focus on enhancing guest experiences, optimizing operations, and gaining competitive advantages. With the advent of advanced AI algorithms, machine learning, and natural language processing, hotels leverage data-driven insights to personalize guest interactions, streamline operations, and maximize revenue. The market is witnessing widespread adoption of AI-powered solutions such as chatbots, predictive analytics, and smart room systems, which are revolutionizing the approach hotels take in engaging with guests and managing their operations. The market is poised to witness continued expansion as hoteliers recognize the strategic importance of AI in meeting evolving guest expectations and driving operational efficiency.

AI in Hospitality Market Growth Factors

The exponential growth of big data is a significant driver fueling the adoption of AI technologies in the hospitality industry. With the proliferation of digital channels and connected devices, hotels are accumulating vast amounts of guest-related data, including preferences, behaviors, and booking patterns. Big data analytics, combined with AI algorithms, enable hotels to derive actionable insights from this data to personalize guest experiences, optimize pricing strategies, and enhance operational efficiency. By utilizing the capabilities of big data, hotels are gaining a deeper understanding of evolving guest needs and preferences, which is leading to improved decision-making, enhanced guest satisfaction, and increased revenue generation.

Despite the numerous benefits of AI in hospitality, concerns about privacy and data security pose significant challenges to market growth. As hotels collect and analyze large volumes of guest data to personalize experiences and optimize operations, there is a growing risk of data breaches, unauthorized access, and misuse of personal information. These concerns undermine guest trust and confidence, as well as raise regulatory compliance issues, particularly with the implementation of data protection laws such as GDPR and CCPA. To address these concerns, hotels are prioritizing data privacy and security measures, including robust encryption protocols, access controls, and transparency in data handling practices, to mitigate risks and foster trust among guests.

AI in Hospitality Market Trends

AI-powered contactless solutions such as chatbots and voice assistants are becoming increasingly popular in the hospitality industry, driven by the need for enhanced hygiene and safety measures in the post-pandemic era. These solutions enable hotels to minimize physical contact between guests and staff, thereby reducing the risk of virus transmission and enhancing guest confidence. Chatbots provide instant assistance to guests for inquiries, bookings, and requests, while voice assistants offer hands-free control over room amenities and services. By leveraging AI-powered contactless solutions, hotels deliver seamless and personalized experiences while prioritizing guest safety and well-being, thereby shaping the dynamics of hospitality service delivery.

Segmentation Analysis

The global AI in hospitality market is segmented based on technology, hospitality type, application, and geography.

By Technology

Based on technology, the market is categorized into machine learning (ML), natural language processing, chatbots or travel bots, and others. The chatbots or travel bots segment is anticipated to witness the highest CAGR of 26.28% over the forecast period as a result of the increasing demand for contactless and personalized guest interactions in the hospitality industry. Chatbots leverage AI algorithms and natural language processing capabilities to provide instant assistance to guests for inquiries, bookings, and requests, thereby enhancing operational efficiency and guest satisfaction. With the rise of digital channels and mobile platforms, chatbots offer a convenient and efficient way for hotels to engage with guests in real time, thus delivering personalized recommendations, resolving issues, and facilitating seamless transactions.

By Hospitality Type

Based on hospitality type, the market is bifurcated into food & beverage and lodging accommodation. The lodging-accommodation segment garnered the highest revenue of USD 9.66 billion in 2023, propelled by the increasing adoption of AI-powered solutions by hotels to enhance guest experiences, optimize operations, and drive revenue growth. AI technologies such as predictive analytics, dynamic pricing, and personalized recommendation engines enable hotels to analyze guest data, forecast demand, and optimize pricing strategies to maximize revenue potential. Additionally, AI-powered smart room systems and contactless solutions enhance guest satisfaction and safety, thereby supporting the growth of the segment.

By Application

Based on application, the market is divided into customer purchases, travel choices, restaurants, entertainment, and others. The customer purchases segment dominated the AI in hospitality market with a share of 32.85% in 2023. AI technologies are revolutionizing the purchase behavior of consumers within the hospitality industry, offering personalized recommendations, tailored promotions, and streamlined booking processes. Through advanced data analytics and machine learning algorithms, businesses are analyzing customer preferences and behaviors to increase sales and enhance customer satisfaction. Furthermore, the adoption of AI-driven solutions is facilitating seamless transactions across various platforms, driving convenience and efficiency for customers and businesses, which is set to fuel the growth of the customer purchases segment in the upcoming years.

AI in Hospitality Market Regional Analysis

Based on region, the global AI in hospitality market is classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

AI in Hospitality Market Size & Share, By Region, 2024-2031

North America secured the highest market share of 31.62% in 2023, fueled by the region's advanced technological infrastructure, high digital adoption rates, and strong hospitality industry ecosystem. With the significant presence of leading AI technology providers, hotels in North America have been at the forefront of adopting AI-powered solutions to enhance guest experiences, optimize operations, and gain competitive advantages. Additionally, the region's affluent consumer base and robust travel and tourism industry have contributed to the rising adoption of AI in hospitality.

Europe is likely to experience significant growth at a 19.28% CAGR between 2024 and 2031 owing to the region's increasing focus on enhancing guest experiences, improving operational efficiency, and driving innovation in the hospitality industry. With the implementation of stringent data protection regulations such as GDPR, European hotels are prioritizing data privacy and security in their AI initiatives, thereby fostering trust and confidence among guests. Additionally, the region's diverse tourism landscape, rich cultural heritage, and growing demand for luxury and boutique accommodations are driving the adoption of AI-powered solutions to deliver personalized experiences and differentiate offerings.

Competitive Landscape

The global AI in hospitality market study will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Expansion & investments are the major strategic initiatives adopted by companies in this sector. Industry players are investing extensively in R&D activities, building new manufacturing facilities, and supply chain optimization.

List of Key Companies in AI in Hospitality Market

Key Industry Developments in Global AI in Hospitality Market

  • March 2024 (Collaboration): Fliggy expanded its collaboration with Amadeus by entering into an agreement aimed at streamlining corporate travel for customers journeying to and from China. This agreement facilitates customer access to hospitality choices via the Amadeus Travel Platform.
  • November 2023 (Expansion): Trip.com Group selected Amazon Web Services (AWS) as its strategic cloud partner to utilize AWS's reliable global infrastructure and cloud solutions for business expansion, improved customer experiences, and innovation in the travel and hospitality sector. Additionally, the company established a joint innovation lab with AWS to develop advanced applications using generative AI and large language models (LLMs).

The global AI in Hospitality Market is segmented as:

By Technology

  • Machine Learning (ML)
  • Natural Language Processing
  • Chatbots or Travel Bots
  • Others

By Hospitality Type

  • Food & Beverage
  • Lodging-Accommodation

By Application

  • Customer Purchases
  • Travel Choices
  • Restaurants
  • Entertainment
  • Others

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • France
    • U.K.
    • Spain
    • Germany
    • Italy
    • Russia
    • Rest of Europe
  • Asia-Pacific
    • China
    • Japan
    • India
    • South Korea
    • Rest of Asia-Pacific
  • Middle East & Africa
    • GCC
    • North Africa
    • South Africa
    • Rest of Middle East & Africa
  • Latin America
    • Brazil
    • Argentina
    • Rest of Latin America
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CUSTOMIZATION OFFERED
  • Check Icon Additional Company Profiles
  • Check Icon Additional Countries
  • Check Icon Cross Segment Analysis
  • Check Icon Regional Market Dynamics
  • Check Icon Country-Level Trend Analysis
  • Check Icon Competitive Landscape Customization
  • Check Icon Extended Forecast Years
  • Check Icon Historical Data Up to 5 Years
Frequently Asked Questions (FAQ's)
The global AI in hospitality market is projected to reach USD 70.32 billion by 2031, growing at a CAGR of 20.36% from 2024 to 2031.
The global AI in hospitality market was valued at USD 16.33 billion in 2023.
The AI in hospitality market is experiencing robust growth, driven by the industry's increasing focus on enhancing guest experiences, optimizing operations, and gaining competitive advantages.
Top manufacturers of AI in hospitality market are IBM Corporation, Microsoft, Amazon Web Services, Inc., Oracle, Google LLC, Intel Corporation, Cisco Systems, Inc., HCL Technologies Limited, Amadeus IT Group SA, Salesforce, Inc., among others.
Asia-Pacific is the fastest growing region with the CAGR of 22.98% in the forecasted period (2024-2031) with the market value forecasted to reach at USD 16.44 billion in 2031.
By hospitality type, lodging-accommodation will hold the maximum share in the AI in hospitality market with the revenue value of USD 38.81 billion in 2031.
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